NNPC remittance to Federation Account reaches N1.87trn in one year

NNPC remittance to Federation Account reaches N1.87trn in one year.

NNPC remittance to Federation Account reaches N1.87trn in one year

The Federation Account Allocation Committee (FAAC) between June 2019 and June 2020, received a total of N1.87 trillion as remittance from the Nigerian National Petroleum Corporation (NNPC), the latest report from the national oil company has indicated.

The full financial report for June also showed that compared to May, NNPC’s operating revenue increased by 32 per cent, but that was wiped out by the corporation’s cumulative expenditure, which equally went up by 32.8 per cent.

Remittance to Federation Account by NNPC is made after the adjustment of crude and product losses as well as pipeline repairs and management cost incurred during the period.

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For the month under review, all its Strategic Business Units (SBUs) suffered various levels of losses, except four, with operating deficit on the non-functional refineries standing at over N10 billion.

According to the report, “In June 2020, NNPC remitted the sum of N68.42 billion to the Federation Account Allocation Committee (FAAC). From June 2019 to June 2020, total NNPC remittances to FAAC is N1.870.13 trillion. Out of this, Federation and JV (Joint Venture) with government priority projects received the sum of N845.42 billion and N1.024 trillion, respectively.

“June 2020, group operating revenue as compared to May 2020, increased by 32.05 per cent or N76.39 billion to stand at N314.72 billion.

“In the same trend, expenditure for the month increased by 32.80 per cent or N77.30 billion, at N312.95 billion. This month (June) expenditure as a proportion of revenue is marginally below par at 0.99; just as was recorded in the previous month.”
NNPC further said it experienced a lower trading surplus of N2.12 billion compared to the N2.68 billion surplus in May 2020, when the world began a fragile recovery from the impact of the COVID-19 pandemic.

A 21 per cent net increase in performance was however achieved, which it attributed primarily to the 166 per cent rise in surplus posted by the Nigerian Petroleum Development Company (NPDC), one of its subsidiaries. The corporation noted that this was a reflection of the on-going global rise in market fundamentals for the second consecutive month, explaining that in addition, the Pipelines and Products Marketing Company (PPMC) continued to enjoy a drop in average product landing cost as profit increased by 22 per cent.

According to the corporation, takings from the Nigerian Gas Company (NGC), Nigerian Gas Marketing Company (NGMC), and Duke Oil Incorporated grew by 16 per cent, one per cent, and 127 per cent, respectively.

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Besides NPDC, PPMC, NGC, and NGMC, which it said recorded relatively commendable performances, all other SBUs, NNPC said, recorded further loss positions with the headquarters’ deficit increasing by 71 per cent compared to May, due to increased terminal benefits made to retired staff that reduced the group surplus for the month.

There was no sale of special products in the month like it was last month, but 767.42 million litres of petrol were supplied into the country through a Direct Sale Direct Purchase (DSDP) arrangement.

The combined value of output by the three refineries (at import parity price) for June 2020 amounted to just about N0.04 billion, with no associated freight cost since there was no production, but operational expenses amounted to N10.27 billion, resulting in an operating deficit of N10.23 billion by the refineries for the month.

NNPC projected that the world economic growth will remain unchanged in 2020 at 3.4 per cent.

Based on the assumptions that COVID-19 will largely be contained on the global level by the fourth quarter of 2020, the corporation said it expected the global economy to grow by 4.1 per cent in 2021.

The corporation stressed that national gas production in June decreased by 0.26 per cent at 231.28BCF compared to output in May 2020, translating to an average daily production of 7,709.38mmscfd.